Tuesday, November 23, 2004

historic preservation and real estate values

This comes to me via Stefan-leih Kuns, who labors tirelessly in the vinyards of Greensboro's Historic District Program. It's Donovan Rypkema's take on how local historic district designation affects property values (Rypkema makes his living studying this kind of thing). He says,

In most cases properties in local historic districts appreciate at rates greater than: a) the local market as a whole, and b) similar neighborhoods that are not designated.

With almost no exception, the worst case scenario for properties within a local historic district is that they will have appreciation rates equivalent to the overall local market.

There seems to be a pattern of properties within local historic districts being less volatile in the downside
of real estate ups and downs.

Now, please note this says Local Districts. They have that impact because of the protections that are typically provided. (i.e. I have some assurance that the lunatic across the street won't be able to do things to his house that will have an adverse impact on the value of mine).

The protections are central to the value enhancements.

When Rypkema says "protections" he means the regulations that govern local historic districts, such as Greensboro's Historic District Design Guidelines.

Lots of free-marketers -- and I'm one -- are regulation-phobic, and plenty of people in Greensboro have complained about historic district designation trampling their property rights. But there's another way of thinking about it.

The local historic district program offers me an economic choice that I wouldn't have if the program didn't exist: namely, the ability to trade some of my property rights for increased capital appreciation. If I don't like it, I can move.

Works for me.


D. Hoggard said...

Funny stuff about Rypkema's belief that historic district regs will protect my from som "idiot actoss the street."

If you get my drift?

David Wharton said...

From some things, there isn't any protection.

Anonymous said...

I just ran across your blog through Google and thought you might like to know that Donovan Rypkema will be speaking about the Economics of Preservation in Southern Pines NC on October 26, 2006. There is more information at www.mimsstudios/CDF/lectures2.htm. Thank you for your post.